Sanlam Kenya Limited will receive Sh220.6 million for transferring its general insurance business to Jubilee-Allianz General Insurance Kenya Limited in a deal that marks part of the strategic alliance between their parent companies.
According to the business transfer agreement between the two insurers, the deal is valued at Sh820.6 million.
The amount comprises Sh600 million, which is the minimum solvency capital that must be maintained by Sanlam General Insurance Limited, the subsidiary being transferred to Jubilee-Allianz.
The remaining Sh220.6 million, referred to as the net consideration, will be paid to the Nairobi Securities Exchange (NSE)-listed company.
The funds will be transferred directly to the insurer’s designated bank account. Sanlam will continue with its life or long-term insurance business.
“The transferor’s (Sanlam Kenya) obligation to transfer the minimum solvency capital in cash will be set off against the transferee’s (Jubilee-Allianz) obligation to pay cash for the minimum solvency capital,” reads the agreement in part.
The deal aligns with the broader SanlamAllianz joint venture through which Sanlam Limited and Allianz SE —which owns significant stakes in Sanlam Kenya and Jubilee-Allianz, respectively— intend to create a pan-African financial services group with a presence in 27 African countries.
Jubilee-Allianz is acquiring Sanlam General’s portfolio valued at about Sh3.09 billion in assets and assuming Sh2.87 billion in liabilities, according to the business transfer agreement.
The largest asset comprises insurance policy contracts, investment securities and reinsurance contracts worth Sh2.54 billion, while the biggest liability relates to insurance and reinsurance contract obligations amounting to Sh2.83 billion.
The agreement shows Jubilee-Allianz will, within 10 days after the completion of the deal, deposit with the Insurance Regulatory Authority, certified copies of statements of assets and liabilities.
Within the period between the agreement and its conclusion, the two firms have agreed to freeze hiring new staff or grant any increase in compensation or benefits to any management, senior employees or executives without the prior written consent of the other party.
The transfer of Sanlam General’s assets to Jubilee-Allianz comes at a time when Sanlam Kenya is rebranding to Sanlam Allianz Holdings, marking a new phase in the insurer’s evolution. The rebrand forms part of a wider pan-African strategic consolidation between Sanlam and Allianz, aimed at strengthening their joint footprint across 27 markets in the continent.
As part of this restructuring, Jubilee Holdings, which holds a minority stake in Jubilee-Allianz, has begun selling its shareholding.
The NSE-listed insurer is set to receive about Sh4.5 billion from the sale of its general insurance stakes in Jubilee-Allianz operations in Kenya, Uganda, Tanzania and Mauritius to Sanlam Allianz Africa.
Under the deal, Jubilee Holdings will sell the entire 34 percent stake it holds in Jubilee Allianz General Insurance (Kenya) Limited, Jubilee Allianz General Insurance (Uganda) Company Limited and Jubilee Allianz General Insurance (Mauritius) Limited.
In addition, Jubilee will sell the 19 percent stake it holds in Jubilee Allianz General Insurance Burundi and the 15 percent stake it owns in Jubilee Allianz General Insurance (Tanzania) Company Limited.
